Antitrust concerns linger in Google Books deal

The revised Google Books settlement agreement may quiet international opponents, but it still gives Google a monopoly on commercializing out-of-print books where the copyrights are unclaimed and fails to protect consumer privacy, opponents said on Monday.

"We're at a cross roads," Internet Archive Director Brewster Kahle said during a panel late Monday on the Future of Books at the Commonwealth Club in San Francisco. "Is it going to be a subscription life...where one or two companies own the distribution and presentation (rights) to these books?"

In response, Google Books Engineering Director Dan Clancy said: "This is just one of a panoply of choices that people will have in the future."

Google is scanning and digitizing books in libraries and publishers' catalogs so people can view and search them online and buy electronic versions. The company is striking deals with publishers for copyright-protected books and offering to pay rights holders to digitize out-of-print works, and will share revenue from sales with authors.

The agreement would settle a 2005 copyright infringement lawsuit filed by the Authors Guild over Google's book scanning plans.

Key concerns focus on licensing rights to so-called "orphan works" where the copyright holder is unknown, as well as books where the rights holder has not stepped forward--together estimated to represent more than half of the available works.

The modified settlement, filed in federal court in New York late on Friday, attempts to address U.S. Department of Justice concerns that the settlement would give Google unfair competitive advantages and violated copyright law.

Copyrights holders now have more control than they previously had. Authors and publishers were given seats on a Books Rights Registry board, a nonprofit that would be responsible for making payments and holding revenue from unclaimed works for up to 10 years. The registry is now required to search for copyright holders who have not yet come forward and revenue from unclaimed works will be used to locate copyright holders instead of for operations or distribution it to known copyright holders.

The revised settlement also could remove some of the heat Google was getting from governments in other countries over copyright concerns. Author and publisher groups in Germany, France, China, and elsewhere have voiced opposition to the Google Books plan. In response, Google, the Authors Guild, and other parties in the settlement excluded any out-of-print works not registered in the U.S. or published in the U.K., Australia, or Canada.

"Just because they are taken out of the agreement doesn't mean Google will stop scanning their books," Pam Samuelson, director of the Berkeley Center for Law & Technology, said of the works from the other countries. "Google has already scanned many of their books."

Also troubling to critics is the fact that the revised settlement circumvents traditional copyright provisions by allowing Google to digitize orphan works without first getting rights holder permission, while any Google competitors are blocked from doing so barring legislation granting them licensing rights.

"For the millions of volumes of orphan books that Google has already scanned in, they can offer those without risk of anyone coming forward and suing them for infringement," said John Simpson, a consumer advocate at Consumer Watchdog.

The Justice Department's main concerns were not addressed, others added. (A DOJ spokeswoman did not return a call seeking comment.)

"The Department of Justice was trying to get them to also create a mechanism for licensing to third parties and the amended settlement agreement doesn't go that far," Samuelson said. "It creates a fiduciary for unclaimed books to potentially license unclaimed books at some point in the future, but only if Congress passes orphan works legislation."

Why monetize unclaimed works before getting permission?
Danny Sullivan, editor-in-chief of Search Engine Land, wrote on his blog: "Given that everyone is so positive that you CAN find rights holders for most of these unclaimed works, why not go out and find them first, then ask if they want to be included. Surely the settlement can generate enough money from books with known authors to fund that without having to include these books at the outset?"

"The Registry is trying to lay claim and charge for, monetize, works that have never been claimed and this is what causes the whole thing to be broken," Kahle of the Internet Archive said after the Commonwealth panel. The Internet Archive has been scanning books and archiving all types of media for years, but on nonprofit resources.

However, Clancy said most of the unclaimed works will eventually be claimed and predicted there would be legislation soon to resolve the matter. "We will have orphan works legislation before this thing is over ... [because of the settlement] people are pushing to resubmit it as we speak," he said.

Samuelson and other critics are worried that as a result of Google having the only comprehensive collection of out-of-print books, there will not be competitive pressure on the company to keep prices fair. "The risk of price gouging over time is very high and universities in particular have experienced excessive increases in prices of scholarly journals over the last few years," she said.

"The settlement is a total failure to address most of the problems the Justice Department raised and virtually all the problems raised by U.S. objectors and amicus [friends of the court] briefs."

--Gary Reback, Open Book Alliance

Samuelson reiterated her concerns about pricing at the Commonwealth panel event, adding that she doesn't think Google will price gouge in the immediate future, but that it could happen in the longer term. Clancy made no assurances but mentioned something about there being alternatives, like physical books, and that "the platform is there to provide the protections."

"The settlement is a total failure to address most of the problems the Justice Department raised and virtually all the problems raised by U.S. objectors and amicus [friends of the court] briefs," said Gary Reback, an antitrust lawyer and leader in the Open Book Alliance, whose members include nonprofit author groups, library institutions, and Google rivals Amazon, Microsoft and Yahoo.

"If we are going to allow Congress to [pass a law granting others licensing rights for orphaned works] why do we need a settlement?" said Reback. "The right way to do this would be to have Congress deal with it; not for Google to give itself a preference."

Of the settlement's handling of orphan works, James Grimmelman, a professor at New York Law School, writes on his blog that "It's a very clever hack. I have my doubts whether it's legal." Google remains "the only game in town" for unclaimed works, he said. (For more on the copyright implications of the settlement read Larry Downes' guest column on CNET News.)

The amended settlement also does not provide privacy protections for consumers that privacy advocates and authors including Michael Chabon, Bruce Schneier, and Jonathan Lethem had requested.

"One of our core privacy concerns with the settlement has been that reading records are not properly protected from disclosure to the government and third parties," the American Civil Liberties Union of Northern California wrote in a blog post. "Readers should be able to use Google Book Search without worrying that the government or a third party is reading over their shoulder."

In response to Samuelson complaining at the Commonwealth event that the revised settlement offers no privacy protections for consumers, Google's Clancy said, "We didn't think the settlement was the right place to discuss this."